Research On The Influence Of Accounting Firms’ Merger On Audit Quality

The accounting firm maintains the principal-agent relationship between investors and managers with an independent third perspective party make the capital market to effective development. Therefore, as the only criterion to measure the level of accounting firms-- the audit quality has become a hotspot of scholar’s research. In recent years, several accounting firm merger wave set off, it is to let the merge of public accountant offices influence on audit quality has become the focus of scholars’ research.Since the end of twentieth Century, under the government policy guidance and the environment of market competition, the merger of CPA firms in China As one falls. Merger accounting firms will make the firm get better brand effect in theory, improve the auditor independence and industry expertise ability, so that the audit quality can be improved, but the majority of China’s accounting firm merger behavior is not due to meet their business needs natural actions, but due to promote or market access the threshold of government policy to improve the. Then, in the third accounting firm merger tide like a raging fire today, accounting firms in the bigger on the basis of doing strong? Firms after the merger audit quality have not been improved? Are the academic and practical circles needs to continue to pay attention to the problem.This paper firstly makes a literature review to the domestic and foreign research results, supplemented by empirical research with normative research, main method of Chinese accounting firm merger effects on audit quality. The normative research introduced the reason and with the status quo of China’s accounting firm merger, then based on the s ize effect theory, the theory of deep pockets, the reputation theory and synergy theory to analyze the influence of Firm Merger on audit quality theoretically. The part of empirical study using 2009-2012 CPA firm before and after the merger of two years for the sample, the merger is 2008-2013 years of a udit clients as the sample data, with the earning management and audit fee as a substitute variable of audit quality, CPA audit quality inspection before and after the merger, whether there are significant differences. The empirical results show that firms after the merger, audit quality have been significantly improved. In addition, the accounting firm according to the types of merger and consolidation of empirical analysis, the results show that t he absorption of the merger the firm after the merger audit quality is significantly higher than before the merger, and the new merger the firm had n o significant change before and after the merger of the audit quality. This shows that the merger does help to improve audit quality, our policy under the guidance of the bigger and stronger has achieved initial success. Finally, summarizes the research conclusions and reasons are analyzed, at the s ame time as the m erger of accounting firms to put for ward the following suggestions: the firm itself should pay atte ntion to the effective integration of brand establishment and the merger of the former preparations and consolidation after, industry associations to actively guide the firm merger and do a good job of supervision, the government should put the focus from the policy guidance to the merging quality after merger control conversion.